A study on Onida and Tata Sky's Problem

EXECUTIVE SUMMARY

The television is now integral part of INDIAN household for entertainment. Since 1950’s, it had fascinated people in deep but it had not able to reach to all people because of unaffordable price till 1990’s. 1990, after opening of Indian economy, it grew drastically reached to common people in mass. After this TV industry had tremendous competition and result of which the prices gone reduced. Then the market grew with the presence of local and foreign players like Sony, LG, Samsung, Philips, Panasonic, etc and they developed new technology from black and White to CRT, LCD, LED and plasma, now growing trend in real motion picture era leads to inventions on 3D television with home theatre which is yet new in market and developing.

We conducted marketing research in Dharwad city. With the information that Onida is not been able to reposition itself effectively we studied the impact of various attributes and other related factors.

 We in our Marketing research study conducted

v  A pilot survey for 30 customers

v  An extensive survey on  customers

  Pilot survey gave us the idea that Onida is mainly the Middle class and lower middle class product when it comes to CRT and Premium class product when it comes to LEDs and LCDs.

With the idea generated from pilot survey and after meeting retailers we worked on the problem statement “How to reposition Onida TV”.

We tested hypothesis on, Distribution of Onida.

The findings we got are as follows:

ONIDA TV

1. People in the low income group still go buying low price TVs.

2. Onida is known for its sound quality so it has to publicize to people that  they are best in sound.

3.      Onida needs to participate on event like cricket, IPL and others to remind people.

4.      The devil has had a greater impact on the minds of consumers and hence Onida must look for repositioning keeping in mind the present situation

5.      Onida need to have imminent celebrity or personality to endorse the product. Look into competitors; they have SRK, Amir and Akshay Kumar etc.

6.      Onida need to tie up with some DTH service to boost its sales.

7.      Onida should increase it’s after sales service to ensure maximize customer satisfaction.

Tata Sky

1)      Correlation matrix this gives the relation between existing variables, such as the correlation between recording and ad influence which are having correlation of 23.3%, this means both factors are interdependent with each other. This means there is a relation between recording attribute and ad of TATA sky. We can make a statement that ad had contributed in raising sales of TATA sky on the focus of recording option. If in ad this recording attribute is focused sharply we can see rise in sales. Similarly other attributes are also related which are shown correlation table.

2)      From total variance, component matrix and scree plot it had shown that the variables age, income, ad & clarity are more influential in consumer purchase behaviour as these are closely associated with the other factors which are shown in rotated component matrix.

3)      And from this research we can influence marketing manager to give more importance on price of clarity of picture, HD service. And to focus merely on age and income wise segments as the data’s are given in frequency analysis.

INDUSTRY BACKGROUND

Television

      On the back of rapid economic growth, India has witnessed a dynamic change in consumer electronics industry. One electronic gadget that has brought new revolution in Indian Electronic Industry is Television Set. Today, India is fast emerging as the key driver in the global television market both as a manufacturer and consumer. The Indian television industry, growing at a steady rate has attracted a number of global companies like Samsung, LG and Sony. Access to superior technology, greater spending and sustaining power differentiates the foreign firms from the domestic ones, thereby resulting in highly intensified market. In recent years; the market for televisions in India has changed rapidly from the conventional CRT technology to LCD technology.

      Over the years Indian colour television industry (CTV) has witnessed drastic changes in the intensity of competition. Exchange schemes, free gifts, price offs, prizes, deferred payment schemes and other incentives as promotional tools have been deployed by the players, which certainly have made the market, vibrant and pulsating. A major factor contributing to the growth has been availability of consumer financing schemes. Concomitantly, the industry has been witnessing a new scenario with a new market profile. The entrenched position of the Indian market leaders in CTVs’ like Videocon, BPL and Onida has been challenged by MNCs such as LG, Samsung, Sony, Philips, AIWA, Akai, Panasonic, Sansui and Sharp; some in a perceptible way, others threatening to do so. The industry is going through turbulent transformation. Companies are relooking at their strategies and are   desperate for growth.

        The entry of Star TV, Zee TV, BBC, and CNN among a host of other private channels has given choice to the consumer. Proliferation of niche as well as mass entertainment channels has led to the purchase of multiple television sets per household. World cup and cricket tournaments are key drivers in the increase of CTV sales. Host of cricket tournaments like Series with Australia and Pakistan, Mini World Cup, World Cup are a major attraction for cricket crazy India and companies are tapping this opportunity by sponsoring cricket related events and running promotions around them.

       In a competitive environment substantial investment in brand building becomes a necessary condition for survival as it is the value and perceptions related to the brand that act as differentiators. Onida launched 14” TV sets named “Candy” with coloured cabinets. The product is essentially customised for the 12-25 year olds who are increasingly looking out for personalised products to cater to their tastes. BPL launched a “convergence” TV under the name BPL digital that combined the Internet and cellular services with the television’s traditional features. LG introduced “Golden Eye” series, incorporating advanced technology. While Sony and Samsung have managed to create premium image, LG offered compelling reasons to purchase. Onida and BPL have laid emphasis on quality and innovation and Videocon has been perceived as value for money brand. Akai, Aiwa, Sansui, Philips have the image of providing good bargain to the consumers.

       The last few years have seen a quantitative and qualitative change in TV technology and software. With the advent of several local and foreign satellite channels, demand for CTVs has seen a rise. Aggressive and innovative marketing strategies and technological advances have led to strong brand differentiation and prices. In the process the industry has evolved with products available at different price points at all levels. This process was also facilitated by growth in production in the organized segment and domestic availability of multinational brands due to lowering of import duties and other liberal measures. The television industry appears to have two clearly differentiated segments. The MNCs have an edge over their Indian counterparts in terms of technology, aggressive marketing strategy, economies of scale in branding through international events and associations combined with a steady flow of capital. The sale of TVs also tends to be event driven. During the Cricket World Cup in 1999, CTV sales recorded a phenomenal rise of 40-50% after which the industry has grown at around 10-12%. Rural market is expected to grow by 25% compared to expected growth of 7-10% for urban area. One of the notable developments have been that the rate of growth in production has been more in terms of quantity or in volume terms rather than the growth in value terms. This has happened because of the constantly falling prices over the years due to competition among major players, aggressive marketing strategies and declining import tariffs. With penetration levels being deplorably low, the industry is focusing on semi urban and rural segment for scaling up demand. For basic models, the market is reaching saturation limit in urban market, and hence value addition, differentiation, superior and new product introduction only can bring high growth in urban areas. Despite the robust volume growth expected over medium to long term, the profitability of CTV players is likely to remain strained. The reduction in raw material costs, the declining CPT prices and chassis costs will be partially offset by the increase in selling costs resulting from the intense competition.

DTH service

DTH service was mainly introduced into the market to provide enhanced features and value added services to the customers’. DTH services provide many features in terms of large number of channels and the quality entertainment features. There are many players in Indian market they are Airtel, Reliance Big Tv, Tata sky, Sun direct, Dish TV

          DTH service nowadays has become necessary for almost all types of customers. DTH service provides customer his/her liberty of changing the channels according to his requirements to satisfy need of gaining information by means of different channels. DTH service also has the capacity to enter to the needs of different types, age and demography of customers. We can see that both urban and rural customers have equal usage to purchase and enjoy the DTH service, as DTH being the main source of entertainment now days .The  reasons for customers going for DTH services are;

1.      If the customers have a cable operator ,there is interruption in the service ,mainly during rainy season

2.      DTH service has better quality in case of picture ,sound and clarity

3.      The customer mainly feels that they have to pay more money to the cable operator compared to the DTH service

4.      In urban areas and metropolitan cities customers hardly find time to watch television, they watch TV in the nights. So the large channel package available becomes advantageous, to see the required channel at ones comfort.

Now days ,customers are increasing ,the players in the DTH industry have also increased their advertising and sales promotion activities .In order to attract more no. of customers  the companies are coming out with large number of offers and value added services. Hence the customer finding it really difficult and is in dilemma to select a app DTH service. The customer while choosing or selecting DTH service mainly thinks of following  features

1.      Channel package

2.      Price

3.      Value added features

4.      Uninterrupted services

5.      Clear picture.

6.      Sound quality

PROBLEM SITUATION

Onida

         Household name in television Onida was founded in 1981 and by 1982 the company had started assembling television sets at its own factory. Superior products backed up by distinctive design, cutting-edge advertising and purposeful marketing made Onida a household name in India.

       A green-horned devil with a long pointed tail was the spokesperson in all its ad campaigns till the 1990s. The ‘Devil’ helped Onida gain substantial market share and brand recall among the customers and become one of the top three television brands in the country. In 1998, Mirco Electronics (the owner of Onida brand) decided to abandon the “Onida Devil” in its communication campaigns as the brand mascot no longer appealed to the Indian consumer.

     In1998, Onida withdrew the mascot citing the same reasons that they have given now. The explanation given in 1998 was that Indian consumers no longer find Devil, who symbolizes Envy, relevant. So they scrapped the famous tag line” Neighbour’s Envy, Owner’s Pride” together with the Devil. But ever since it changed the tagline and mascot, Onida never found a powerful positioning. After six years of drifting around, Onida brought back the Devil with much fanfare in 2004.But the comeback was damp squib. The brand suffered heavily due to ownership issues within the company. There was no brand promotion or new product launches worth talking about since 2004. If at all there were launches, promotions were not sufficient enough. This leads to marketing problem of repositioning Onida TV .

Tata Sky

Tata Sky is a DTH satellite television provider in India, using MPEG-2 digital compression technology, transmitting using INSAT 4A at 83.0°E. Its main competitors are cable television and other DTH service providers - Airtel digital TV, Reliance Big TV, DD Direct+, Dish TV, Sun Direct, and Videocon D2H. It is a joint venture between the Tata Group, that owns 80% and STAR Group that owns a 20% stake. Tata Sky was incorporated in 2004 but was launched only in 2006. It currently offers close to 196 channels (as of December 2010) and some interactive ones; this count includes some numbers off HD channels offered by Tata Sky (as Tata Sky-HD) and interactive services also. In March 2010 Sun Microsystems partnered with Tata sky to provide IT Infrastructure solutions and support for the launch of the company's direct-to-home (DTH) television .The company uses the Sky brand owned by British Sky Broadcasting.

                             In October 2008, Tata Sky announced launching of DVR service Tata Sky+ which allowed 90 hours of recording in a MPEG-4 compatible Set Top Box. The remote is provided with playback control keys and is being sold with special offers for existing subscribers .In 2008, Singapore-based Temasek Holdings picked up 10% stake in Tata Sky from the Tata Group. This has diluted Tata's stake in the venture to 75%.STAR’s parent company, News Corporation, owns an International group of DTH businesses that include Sky Italia in Italy and Foxtel in Australia.

Make my pack

In 2010 Tata Sky launched India's first a-la carte service Which enables subscribers to either create their own pack with only individual channels or do a mix-n-match of the existing True Choice packs with standalone channels.

Tata Sky+

Tata Sky+ is a premium set-top box-cum-Personal Video Recorder or even known as DVR Digital Video Recorder that allows recording up to 130 hours of live TV, recording one programmed while watching another, pause, fast-forward and rewind a live telecast and review a TV programmed. Also Tata Sky+ provides service using MPEG-4 digital compression technology.

Tata Sky HD

Tata Sky HD was launched on June 14, 2010, and has channels in their native resolution of 1080i or 720p. The STB is compatible with 5.1 CH surround sound as well. The service currently offers five HD channels - National Geographic Channel HD, Discovery HD, Showcase HD (Pay Per View) , Star Plus HD (up scaled SD channel) and ESPN HD, Star Cricket HD (Event Based). More channels such as Star Movies HD and other popular sports channels in HD format are expected to be added soon. Tata Sky had launched their HD DVR Set Top Box. Tata sky plus HD comes with a massive 500 GB hard-disk allowing 625 hours of TV recording (non-HD).

Market share

(1) Dish tv (2005) = 4.5 million =31 % market share(NOW 6.5 MILLION)

(2) Tata sky (2006) = 4 million = 26 % market share(OVER 4.5 MILION)

(3) Sun dth (dec,2007) = 3.5 million = 23 % market share(OVER 5.O MILION)

(4) Big tv (aug,2008) = 1.8 million = 12 % market share(NOW OVER 2.2 MILION)

(5) Airtel dth (oct,2008) = 1 million=8% market share(NOW OVER 1.2 MILION)

Tata sky = india's only ISO:2009 certified dth company

         

 Airtel dth = only dth company with World space Radio service

With all these things Tata Sky has not been successful enough to reduce the price of its service compared to other competitors

 MARKETING PROBLEM

1. How to reposition Onida Television?

2. Is TATA SKY DTH too costly for the customer?

MAIN PROBLEM	SUB PROBLEM	RESEARCH PROBLEM	HYPOTHESIS	QUESTIONS RELATING TO HYPOTHESIS
ONIDA
How to reposition Onida television?	1] How to strengthen brand image of Onida Television?	1. Will the approach of sharp focus create niche positioning? 2. Will aggressive CSR enhance Onida’s image? 3. Does more expenditure on advertisements ensure proportionate increase in sales? 4. Will the bringing back of The original Mascot (The devil) strengthen the image?	1.      People  in the age group of 30 - 40 are more likely to buy Onida TV 2.      Any household above 20k/ month salary is a Onida customer 3.      Customers who consider price while purchasing are Onida customers 4.      People who consider size and weight while purchasing are Onida customers 5.      Customers who require clear picture quality are Onida Customers 6.      People who consider type of TV while purchasing are Onida customers 7.      People  who require good sound quality are Onida Customers 8.      Customer having a considerable drawing room buys an Onida TV 9.      Customer who look for after sales services are  Onida TV customers 10.  The ads about Onida TV influence customers to go for buying Onida TV 11.  The existence of Onida TV showroom or retail outlet in the vicinity is the reason for people being an Onida customer.	Question no. 2, Question no. 3, Question no. 4, Question no.5, Question no.6, Question no.7, Question no.8, Question no.9, Question no.15 Question no.13 Question no.15
	2] How to create effective brand image?	1. Will event sponsoring promote Onida TV brand? 2. Will celebrity endorsement promote Onida TV brand? 3. Has the frequent change in Tagline, diluted Onida’s brand value? 4. Does more expenditure on advertisements ensure proportionate increase in sales? 5. Will change in Ad agency create an effective positioning?	1.      All households strongly agree that brand ambassadors influence them in making the purchase. 2.      Any household feels easy, short tagline is better. 3.      Frequent change in tagline will dilute image of company. 4.      The increase in expenditure on advertisement will lead to proportionate increase in sales.	Question no 11, Question no.14, Question no.12  Question no.13
TATA SKY
How to increase market share of TATA SKY?	1] Is TATA SKY STB costly to the customer?	1. Is installation of Tata sky STB costlier compared to others? 2. Existence of Tata Sky outlet in the vicinity? 3. Will reduction in price increase in sales? 4. To what extent the price must be reduced? 5. In case price is reduced, what services should be withdrawn to maintain reasonable profit margin?	1] Person who is the fan of AMIR KHAN is a customer of TATA SKY. 2] Village people are customers of TATA SKY because of existence of TATA SKY outlet. (Q5,Q6) 3] Person who does like to have DIGITAL quality picture (clarity) is a TATA SKY customer.(Q7,Q8) 4] Person who does like to spend more money for quality of service is a TATA SKY customer.(Q9,Q10) 5] Person who is more selective in entertainment channel.(Q11,Q12,Q13,Q14) 6] Persons who do like to watch his/her favorites program by recording them while they are busy in doing other work are TATA SKY customer.(Q15,Q16,Q17) 7] Person who do like to watch HD quality pictures are customers of TATA SKY.(Q18,Q19,Q20,Q21)	Question no. 2,3, Question  no.4,5, Question no.6,7, Question no.8, Question no.9,10,11 Question no.12,13, Question no.14,15,16
	2] Does TATA sky offer costlier channel package?	1. Are more ads on different packages is making consumer confuse? 2. If subscriber can choose any channel then why to concentrate more on providing different packages? 3. How other competitors manage to give service with reasonable price? 4. Is TATA SKY following the strategy of “High cost – High quality” ? 5. In this DTH competition what would be the effective price?	1] A person whose salary is more than 10,000 per month is a customer. 2] A person who lives in remote place is a customer. 3] A person who does like to ensure continuous reliable service. 4] Person who does like to have branded DTH service is a customer of TATA SKY. 5] Person who does like to get attractive DTH antenna is a customer. 6] Family which does like to change their channel package over a period of time on continuous basis is a customer. 7] A family which does like to show up their status is a TATA SKY customer. 8] Family which does like to see their children’s enjoying freer cartoon channels. 9] Ad lover of especially on DTH service are likely to be customer of TATA SKY. 10] People who believe “high cost -high quality” are customers of TATA SKY DTH.	Question no.17,18, Question no.19, Question no.20, Question no.21,22, Question no.23,24,25, Question no.27 Question no. Question no. Question no.30,31

RECOMMENDATIONS

Onida TV

Onida is known brand in Indian market. Its devil portrayal was the irony of the envy on those days. But, television these days is no more luxurious and dreamt product, it is need. Since Onida has removed the devil concept, it has lost in marketing. The obvious reason was myriad foreign brands, wide choice and insurmountable technology.

There is no other way than accepting dreadful competition from huge MNCs. The following are the few recommendations; we arrived after thorough study of Onida television and Indian television market;

3.      Onida should bank on some niche feature. It is known for its sound quality. But it has to publicize to people that they are best in sound.

4.      Onida needs to participate on event like cricket, IPL and others to remind people.

5.      The devil has had a greater impact on the minds of consumers and hence Onida must look for repositioning keeping in mind the present situation

6.      Onida need to have imminent celebrity or personality to endorse the product. Look into competitors; they have SRK, Amir and Akshay Kumar etc.

7.      Onida need to have short and sweet tagline and must stick it for long horizon of time.

8.      Onida need to tie up with various dealers for selling and transferring the title.

9.      Onida need to tie up with some DTH service to boost its sales.

10.  Onida should come up with wide range of television to ensure the customers will get what they want.

11.  Onida should increase it’s after sales service to ensure maximize customer satisfaction.

Tata Sky

   Tata Sky has privilege among the DTH services to have parent company as Tata, India most valued brand. Moreover, Amir Khan, topmost celebrity is endorsing it. Tata Sky is fairly doing well in the market. The following are recommendations after our study of the industry and feedback from the customers;

12.  The cost of Tata Sky is high because of set up box. They should reduce charging huge amount on it.

13.  The Tata Sky need to increase its channel in rural area. Because the rural market is not penetrated fully. There are more potential customers in rural.

14.  The company can have two different products for rural and urban. They should reduce customized services and offer basic product for rural area and more customized product for urban area.

15.  The company can make alliance with Television Company to increase its customer base.

Note: This Mini project is work of team for IInd semester Marketing Research, and submitted to Prof. Dr. M. S. Subhas, The Dean and Director of Kousali Institute of Management Studies, Karnatak University, Dharwad.

Regards;

Binod Biyogee

Dated: 30^th May 2011